Annexes to COM(2018)40 - Implementation of the EC recommendation on common principles for injunctive and compensatory collective redress mechanisms concerning violations of rights granted under EU law

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dossier COM(2018)40 - Implementation of the EC recommendation on common principles for injunctive and compensatory collective redress mechanisms ...
document COM(2018)40 EN
date January 25, 2018
Annex I to the Directive, as transposed into national legal orders, which harm collective consumer interests. Some Member States provide for collective injunctions in other specified fields. 34  

As regards the length of the injunction procedure, under the Injunction Directive collective injunction actions in the consumer area must be processed ‘with all due expediency, where appropriate by way of summary procedure’ 35 . Irrespective of the area of law in question, all Member States provide for a possibility to apply for provisional measures under their general civil procedural rules. Such applications are by definition dealt with rather quickly as their very purpose is to prevent the occurrence of further potentially irreversible damage until a decision on the merits is issued. In the consumer cases the Fitness Check reveals that there is a clear need for making injunctions more effective and the length of the procedure is reported as an issue. However, the practical effectiveness of that tool may be compromised where collective injunction procedures are not available.


2.2.2Effective enforcement of injunctions

The Recommendation urges Member States to ensure effective enforcement of injunctive orders through appropriate sanctions, including a fine for each day of non-compliance 36 .


The enforcement of injunctions is generally carried out through the same measures irrespective of whether the injunctive order was issued in individual or collective proceedings.

The Injunctions Directive requires specific enforcement measures for non-compliance with the injunctions order in consumer matters in the form of payments of a fixed amount for each day of non-compliance or any other amounts to the public purse or other beneficiaries, but only ‘in so far as the legal system of the Member State concerned so permits’ 37 . All Member States have such penalties for non-compliance in place, including those in which non-judicial authorities are competent for injunctions. However, according to the Study supporting the Fitness Check it is doubtful in some cases whether the penalties are sufficiently deterrent in nature to discourage continued infringements 38 .

As a complementary enforcement method, the Injunctions Directive creates a possibility to order the publication of injunctions orders and corrective statements, albeit only ‘where appropriate’. Such measures can be a very effective remedy in terms of informing consumers of the infringement and as a deterrent to traders who fear damage to their reputation. Information of the general public has been complemented in some Member States by more targeted information of affected consumers so that they can consider follow-on action for damages.

Outside the scope of the Injunctions Directive, fines are available in all Member States to prompt the losing defendant to quickly implement an injunctions order 39 . In addition, in some Member States (CY, IE, LT, MT, UK) disobedience of a court order is a criminal offence.


2.3Compensation


2.3.1Opt-in

The Recommendation urges Member States to introduce in their national collective redress schemes the principle of "opt-in", whereby the natural or legal persons joining the action should do so based on their express consent only. They should be able to join or withdraw from the action until judgment is given or the case is settled. Exceptions to this principle are admissible but should be justified by reasons of sound administration of justice 40 .


The background to the adoption of this principle is the need to avoid abusive litigation, where parties are involved in litigation without their expressed consent. The application of the opposite principle, the so-called "opt-out", where parties belonging to a certain class/group automatically take part in the litigation/out of court settlement unless they expressively withdraw, could be considered as problematic in certain circumstances, in particular in cross-border cases. This has to do with the fact that parties domiciled in other countries may not know about ongoing litigation and thus may find themselves in a situation where they participate in a pending case without their knowledge. On the other hand, the "opt-out" principle could be considered a more effective approach and may be justified where the protection of collective interests appears necessary but the explicit consent of affected persons is difficult to obtain, e.g. in domestic consumer cases with low individual damages not incentivising the exercise of an "opt-in" but with high accumulated damages 41 .

There is a diverse application of this principle in the Member States where compensatory collective redress mechanisms are available. There are 13 Member States (AT, FI, FR, DE, EL, HU, IT, LT, MT, PL, RO, ES, SE) that exclusively apply the "opt-in" principle in their national collective redress schemes. There are 4 Member States (BE, BG, DK, UK) that apply both the "opt-in" and the "opt-out" principle, depending on the type of action or the specifics of the case, while 2 Member States (NL and PT) apply only the "opt-out" principle.

Among the Member States who have adopted or amended their legislation after the adoption of the Recommendation, LT and FR have introduced opt-in systems, while BE and the UK have in the newly introduced schemes (e.g. competition cases in the UK) a hybrid system of either opt-in or opt-out, left at the discretion of the court.

In BE the application of either of these principles is assessed on a case-by-case basis with the aim to see how best to protect the interests of the consumers. However, where the claimants are foreign the Belgian system prescribes the "opt-in" principle. The same trend can be seen in the new UK system in competition law cases where the "opt-out" order made by the court will preclude further litigation only for claimants domiciled in the UK.

The new legislative proposal pending in NL continues the status-quo and applies the "opt-out" principle. The proposal in SI introduces the "opt-in" principle, with "opt-out" being made available as an exception where reasons of sound administration of justice justifies it (e.g. low value of the individual claims).

It can be concluded that while the vast majority of Member States apply the opt-in principle in all or in specific types of collective redress actions, the Recommendation has had a limited effect on the laws of the Member States. At the same time, the new legislation in BE and the UK shows that even where the opt-out principle is applied there appears to be the perception of a need to distinguish between purely domestic and cross-border cases and to rely more on the "opt-in" principle in cross-border contexts.


2.3.2Collective out-of-court dispute resolution

The Recommendation urges Member States to encourage parties to settle their disputes consensually or out-of-court, before or during the litigation and to make collective out-of-court dispute resolution mechanisms available alongside or as a voluntary element of judicial collective redress. Limitation periods applicable to the claims should be suspended during the alternative dispute resolution procedure. The binding outcome of a collective settlement should be controlled by a court 42 .


Collective out-of-court dispute resolution schemes should take into account the requirements of Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters 43 but should also be specifically tailored for collective actions 44 .

Introducing such schemes in collective redress mechanisms is an efficient way of dealing with mass harm situations, with potential positive effects on the length of the proceedings and on the costs for parties and judicial systems.

Among the 19 Member States that have compensatory relief schemes, 11 have introduced specific provisions on collective out-of-court dispute resolution mechanisms (BE, BG, DK, FR, DE, IT, LT, NL, PL, PT, UK). This list includes the three Member States that have adopted new legislation after the adoption of the Recommendation (BE, FR and LT) as well as the UK which introduced a specific provision on out-of-court dispute resolution in the competition mechanism. In its legislative proposal, SI is largely following the Recommendation. The remaining 8 Member States that have collective redress schemes apply general provisions on out-of-court dispute resolution to such situations, for instance as implemented in the national legislation pursuant to Directive 2008/52/EC.

While the availability of ADR schemes under national law is positive per se, provisions designed for collective actions could better take into account certain specificities of such collective actions. For instance, the Recommendation provides that the use of collective out-of-court dispute resolution should depend on the express consent of the parties involved whereas in relation to individual claims it may be mandatory 45 . In addition, an important element to ensure that the rights of the parties involved are protected is the subsequent control of settlements by courts.

The call for evidence revealed an important trend in relation to collective out-of-court dispute resolution, namely the conclusion of cases consensually through direct settlement negotiation, without the involvement of a third party 46 .

It can be thus concluded that, while all the Member States that recently changed, introduced or are about to introduce new legislation have largely followed the Recommendation, access to collective out-of-court dispute resolution schemes adjusted to the specific context of collective redress is not granted in a significant number of Member States.


2.3.3Lawyers' fees

The Recommendation provides that the lawyers' remuneration and the method of calculation should not create unnecessary incentives to litigation that is not in the interest of any of the parties. In particular, contingency fees, which risk creating such incentives, should be prohibited; where they are exceptionally allowed they should be appropriately regulated in collective redress cases taking into account the right to full compensation of the members of the claimant party 47 .


Generally speaking lawyers' fees are not regulated in Member States depending on the types of cases, such as specifically for collective redress actions.

There are 9 Member States (BG, CY, CZ, DE, EL, PL, SI, ES, UK) that allow for some form of contingency fee, with the amount to be paid to the lawyer ranging from 15% under SI draft legislation to 50% of the value of the award in the UK. In all these Member States, except for the UK, there appear to be specific provisions on the operation of such remuneration in collective redress actions. A notable exception to this rule is found in the UK's competition scheme, where contingency fee agreements are not available in opt-out competition court proceedings. In addition, the legislative proposal in SI specifically reiterates the availability of contingency fees in collective redress cases.

It should be noted that not all forms of contingency fees can be regarded as encouraging litigation against the interest of the parties involved. For instance, in DE contingency fees are allowed only in exceptional circumstances where the alleged victim lacks financial means and can only pursue his claim with a contingency fee arrangement. At the same time, a contingency fee of up to 50% of the award as in the UK or up to 33% in ES appears more likely to incentivise unnecessary litigation.

Other Member States allow for performance fees, either in the form of a success fee, or, on the contrary, a reduction in the remuneration in case certain goals are not achieved (AT, BE, FR, IT, LT, LU, PL, SE). The main difference between the two types of remuneration is that in the case of performance fees, the lawyer gets paid even if he loses the case but will be paid more, the so-called success fee, if he wins whereas in the case of contingency fees the lawyer does not get paid at all unless he wins the case. While performance fees are not an incentive to unnecessary litigation per se and neither does the Recommendation call for their prohibition, they can, in certain circumstances, produce similar effects. They could encourage unnecessary claims for unrealistic amounts particularly where they are calculated as a percentage of the award. On the other hand, a flat rate performance fee appears less likely to create an incentive for aggressive litigation practices.

In the framework of the call for evidence two respondents from NL and FI mentioned lawyers' fees as problematic - not necessarily where based on contingency fee, but as a factor which contributes to the high costs of collective redress proceedings, especially when taken together with the loser pays principle. In addition, a respondent from the UK submitted the example of a case where the national court held that the collective claim, which was driven by a law firm working on contingency fee, was an abuse of process. The same respondent highlighted the potential high revenue for lawyers or for third-part funders as a problem in particular in "opt-out" systems, where it is difficult to provide compensation to the harmed individuals because of the high costs involved to determine whether such individuals fall within a certain class.

It can be concluded that the Recommendation has had a very limited impact on the system of lawyers' fees in the Member States. However the Member States that have adopted new legislation following the adoption of the Recommendation have not introduced contingency fees except SI which provides for such fees in the pending legislative proposal on collective redress. The system of lawyers' fees seems embedded in the national procedural law traditions of the Member States and there is no evidence that any change was contemplated to such systems to address the specific concerns of collective redress actions.


2.3.4Punitive damages

The Recommendation calls for a prohibition of punitive damages as well as of other awards exceeding the compensation that would have been obtained in individual litigation 48 .


The concept of overcompensation by punitive damages is generally alien to the majority of the Member States' legal systems. The call for evidence did not reveal any case where punitive damages were requested or granted in collective redress actions. This means that there was no need for special rules to apply in collective redress actions.

Only three Member States admit some form of punitive damages, albeit in a very limited form. EL for example applies some form of damages akin to punitive damages in the form of monetary compensation for moral damages in representative consumer claims. In IE the recovery of punitive damages is generally rare 49 and is usually limited to public policy grounds. Finally, in the UK (England and Wales) punitive damages are available in very rare circumstances where the defendant must have known he was acting unlawfully and continued with his conduct in the expectation that his gain would exceed any compensation which could be awarded to the victims of his conduct. However, punitive damages are not available in the competition mechanism, introduced by the 2014 Antitrust Damages Directive 50 after the adoption of the Recommendation.

It can be concluded that the majority of Member States do not award punitive damages in mass harm situations as a result of the general approach taken on the basis of a long standing principle in the Member States' civil law systems.


2.3.5Follow-on actions

The Recommendation urges Member State to include in their legislation a rule based on which if proceedings before a public authority are pending, private action should only start after the conclusion of those proceedings. If such proceedings started after the private action, the court where the latter action is pending should be able to stay proceedings to await a final decision of the public authority. The expiration of limitation or prescription periods before the public authority issues a final decision should not prevent parties from seeking compensation in private action 51 .


For reasons of procedural economy and legal certainty, compensatory relief action can be more efficient if introduced after the completion of the procedure before a public authority, be it a court or an administrative body such as a competition authority. However, awaiting such a decision should not have the result of depriving potential claimants of their right of access to court, for instance because of the expiry of limitation or prescription periods.

Rules under binding Union law in that respect only exist in the area of competition. Under the Antitrust Damages Directive a finding of an infringement in a final decision of a national competition authority or by a review court is deemed to be irrefutably established in domestic follow-on actions for damages and at least prima facie evidence in follow-on action in other Member States. The Directive also provides for the suspension of limitation periods. It applies to collective actions where they exist, but it does not require Member States to introduce collective actions in their national legal systems.

In regards to consumer law, the Injunctions Directive does not regulate the issue of the follow-on actions. In most Member States the injunction order only has an inter partes effect (between the parties). According to the Fitness Check Study, this poses problems for the effectiveness of the procedure since individual consumers who bring claims for damages based on an infringement that gave rise to an injunction have to prove the infringement anew. This in turn increases their litigation risk as well as costs for them and for the court system at large. Therefore, the Study indicates that it should be possible to rely on injunction orders in follow-on actions for compensation both of individual and (where available) collective nature and that prescription periods for follow-on damages actions should be suspended until the final injunctions decision.

In DK, BE and IT it is possible to rely on an injunctions decision in a follow-on collective action in consumer law cases. Collective horizontal actions can be initiated in BG. In NL follow-on actions are possible not as a matter of law but rather of practice

The call for evidence shows that follow-on actions are resorted to mostly in competition law cases, where compensatory relief actions follow a decision of a public authority on an infringement of competition law. Such cases were reported from NL, FI and UK. One interesting consumer case in the area of financial services was reported from FI, where subsequent to the administrative and the court decisions on an infringement, successful direct negotiations were engaged between the consumer association and the defendant.


It can be therefore concluded on this point that the Recommendation is implemented in the laws of the Member States only to a very limited extent. While collective follow-on actions are available in a number of Member States, there is no evidence that 52 the principles of the Recommendation have been followed with regard to the priority to be given to the decision of the public authority and to limitation periods. Therefore, such follow-on actions can have an impact on the right of access to courts of the claimants due to the fact that no specific rules on limitation or prescription period were enacted, contrary to what is suggested in the Recommendation.


2.3.6Registry of collective actions

The Recommendation invites the establishment of national registries of collective redress actions, also disseminating information on the available methods of obtaining compensation, including out of courts methods. Coherence between the information gathered in different national registries and their interoperability should also be ensured 53 .


This principle was introduced in the Recommendation in particular due to the fact that only where information is available on pending litigation can the "opt-in" principle be implemented and thus parties can decide whether to join in pending litigation or not. This need is even more pressing in cross-border situations where national methods of dissemination of information are not always directed to a foreign public.

This principle is by and large not followed in the collective redress schemes of the Member States. Only the UK has a national registry for group litigation orders and one for competition actions. SI intends to introduce such a registry in its new legislation on collective redress. It can be thus concluded on this point that the Recommendation had almost no impact on the laws of the Member States.

3Conclusions and next Steps

As expressed in the Recommendation, appropriately designed and balanced collective redress mechanism contribute to the effective protection and enforcement of rights granted under Union law, since "traditional" remedies are not sufficiently efficient in all situations.

Without a clear, fair, transparent and accessible system of collective redress, there is a significant likelihood that other ways of claiming compensation will be explored, which are often prone to potential abuse negatively affecting both parties to the dispute.

In many instances affected persons who are unable to join forces in order to seek a redress collectively will abandon their justified claims at all, due to excessive burdens of individual proceedings.

The Recommendation created a benchmark comprising the principles of a European model of collective redress. This happened in a situation in which many of its elements were present in the legal systems of a large part of the Member States while in other, albeit smaller group of Member States the very concept of collective redress was not known. Therefore the impact of the Recommendation should be seen and considered in two dimensions: first as a point of reference in discussions on facilitation of access to justice and prevention of abusive litigation, and second as a concrete incentive to adopt legislation complying with these principles in Member States.

With regard to the first dimension, the Recommendation has made a valuable contribution in terms of inspiring discussions across the EU. It also provides a basis for further reflection on how some principles such as those concerning the constitution of the claimant party or financing of litigation may best be implemented to guarantee the overall balance between the access to justice and prevention of abuses.

As far as the transition into legislation is concerned, the analysis of the legislative developments in Member States as well as the evidence provided demonstrate that there has been a rather limited follow-up to the Recommendation. The availability of collective redress mechanisms as well as the implementation of safeguards against the potential abuse of such mechanisms is still very unevenly distributed across the EU. The impact of the Recommendation is visible in the two Member States where new legislation was adopted after its adoption (BE and LT) as well as in SI where new legislation is pending, and to a certain extent in the Member States that changed their legislation after 2013 (FR and UK).

This limited follow-up means that the potential of the principles of the Recommendation in facilitating access to justice for the benefit of the functioning of the single market is still far from being fully exploited. There are 9 Member States that do still not provide for any possibility to collectively claim compensation in mass harm situations as defined by the Recommendation. Furthermore, in some Member States that formally provide for such possibility, in practice affected persons do not use it due to the rigid conditions set out in national legislation, the lengthy nature of procedures or perceived excessive costs in relation to the expected benefits of such actions. The call for evidence has also demonstrated that in some cases collective judicial action can be usefully avoided because of successful out-of-court settlements, sometimes as follow-on to an administrative action. This highlights the importance of effective out-of-court disputes resolution mechanisms in line with the Recommendation.

Whilst the Recommendation has a horizontal dimension given the different areas in which mass harm may occur, the concrete cases reported, including the car emissions case, clearly demonstrate that the areas of the EU law relevant for collective interests of consumers are those in which collective redress is most often made available, in which actions are most often brought and in which the absence of collective remedies is of biggest practical relevance. It is in those same areas that binding EU rules on the injunctive dimension of collective redress exist and have proven their value. The Injunctions Directive regulates representative action initiated by qualified entities in particular in the form of non-profit organisations or public authorities in relation to which concerns regarding abusive litigation driven by profit interests of third-party funders appear to be unfounded.

This picture is confirmed by the results of the call for evidence. While consumer organisations make a strong case for EU-wide intervention in this field, business organisations generally focus their concerns in relation to EU action on the consumer area and refer to proportionality or subsidiarity concerns, urging the Commission to concentrate on public enforcement or on redress via ADR/ODR or the small claims procedure.


Against that background, the Commission intends

·to further promote the principles set out in the 2013 Recommendation across all areas, both in terms of availability of collective redress actions in national legislations and thus of improving access to justice, and in terms of providing the necessary safeguards against abusive litigation;

·to carry out further analysis for some aspects of the Recommendation which are key to preventing abuses and to ensuring safe use of collective redress mechanisms, such as regarding funding of collective actions, in order to get better a picture of the design and practical implementation;

·to follow-up this assessment of the 2013 Recommendation in the framework of the forthcoming initiative on a "New Deal for Consumers", as announced in the Commission Work Programme for 2018 54 , with a particular focus on strengthening the redress and enforcement aspects of the Injunctions Directive in appropriate areas.

(1)

Adoption of Directive 98/27/EC on injunctions for the protection of consumers' interests; Green Paper on antitrust actions (COM2005)672; White Paper on antitrust actions (COM(2008)165); Green Paper on consumer collective redress (COM(2008)794).

(2)

OJ L 201, 26.7.2013, p. 60–65

(3)

Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the protection of consumers' interests (O.J.E.U. L 110/30 of 1.5.2009 ) codifying Directive 98/27/EC


(4)

 COM report of the Fitness Check of EU consumer and marketing law, Brussels, 23.5.2017, SWD(2017) 209 final, available at http://ec.europa.eu/newsroom/just/item-detail.cfm?item_id=59332

(5)

 To be published soon at http://ec.europa.eu/justice/civil/document/index_en.htm  

(6)

Available at http://ec.europa.eu/newsroom/just/item-detail.cfm?item_id=59332

(7)

See point 2.3.1 of this Report

(8)

Paragraph 2 of the Commission Recommendation of 11 June 2013 on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union law (2013/396/EU) (OJ L 201 p. 60 of 26.7.2013)

(9)

The scope of the Injunctions Directive covers infringements of EU consumer laws as enumerated in its Annex I.

(10)

With the exception of DE, where the only specific compensatory collective redress mechanisms does not apply to consumers, but to investors' claims only.

(11)

However, in NL collective compensatory relief is currently available only in the form of declaratory judgments, or through special legal vehicles created for the purpose of collecting claims.

(12)

Paragraphs 4 to 7 of the Commission Recommendation

(13)

Directive 2014/54/EU on measures facilitating the exercise of rights conferred on workers in the context of freedom of workers (O.J. L 128 p.8 of 30.4.2014) under Article 3(2) requires Member States to ensure that associations, organisations (including social partners) or other entities may represent Union workers in judicial and/or administrative proceedings in order to ensure enforcement of rights.

(14)

In addition, in DK in private group actions the representative may be appointed from among the class members.

(15)

Interestingly, in spite of these demanding conditions 18 organisations are currently registered in Italy and 15 in France. However, only a rather limited number of those entities (6 in FR, 3 in IT during the last 4 years) have actually lodged representative actions.

(16)

In addition, in competition cases in the UK a class member can also represent the class which makes this procedure a group action rather than representative action within the meaning of the Recommendation.

(17)

Paragraphs 8 and 9 of the Commission Recommendation

(18)

For example in Belgium, the court has to take into account inter alia the potential size of the group of affected consumers, the degree of complexity of the action for collective redress, and the implications for efficient consumer protection as well as the smooth functioning of justice.

(19)

For example in Italy, apart from the question of the standing of the entity the court has to examine if there is a conflict of interest.

(20)

In BE and NL the rules on admissibility were named as being problematic, while the length of that procedure was expressly mentioned for BE and PL. In Demark the rules on admissibility were named as problematic in the context of restrictive rules on legal standing. In PL the requirement that the amounts claimed must be identical at least in several sub-groups may deter potential group members from participating in the action or lead them to reduce their claims to be eligible. Similarly, in the UK the strict interpretation in competition law cases of the requirement that claims should raise the same, similar or related issues of fact or law, as an admissibility requirement, was considered by one respondent to be problematic in the context of gaining access to justice.

(21)

Paragraphs 10 to 12 of the Commission Recommendation

(22)

As explained in point 3.5 of the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions "Towards a European Horizontal Framework for Collective Redress" ( COM/2013/0401 final).

.

(23)

Paragraph 13 of the Commission Recommendation

(24)

In LU the successful party may be awarded a procedural indemnity the amount of which is decided by a judge but this requires a subsequent application to the court and thus additional effort.

(25)

Or the absence of fees in consumer injunctive proceedings before administrative authorities (FI, LV). The Injunctions Directive does not regulate the issue of costs related to the injunction procedure. Nevertheless, the financial risk related to injunctions has been identified as the most crucial obstacle to the effective use of injunctions for qualified entities. According to the study supporting the Fitness check the most effective measure would be to include a rule in the Injunctions Directive according to which, in objectively justified cases, qualified entities would not have to pay court or administrative fees.

(26)

Several respondents to the call for evidence from BE, NL, RO and FI identified this principle as a potential problem as the potential reimbursement of costs is an important risk factor to be taken into account when introducing a claim. This is more so where no compensatory collective redress is available, such as in CZ, and such claims can be lodged only in individual cases.


(27)

For example, if lawyers' fees are reimbursed at the level of statutory fees which may be exceeded in practice.

(28)

Paragraphs 14 to 16 and 32 of the Commission Recommendation

(29)

Under common law, anyone who improperly funds the litigation of another may be found liable for all the (adverse) costs of that litigation if the case is lost.

(30)

Paragraphs 17 and 18 of the Commission Recommendation

(31)

Finally, two respondents from AT expressed concern that the protective consumer jurisdiction rule of the Brussels I Regulation (Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 351, 20.12.2012, p. 1) do not apply to representative entities.

(32)

See Article 4 of the Injunctions Directive establishing a system for notification of qualified entities to be included in a list published by the European Commission in the Official Journal of the European Union. However, according to the Fitness Check report qualified entities almost never seek injunctions in other Member States, in particular due to the related costs and because in most cases they can seek injunctions in their jurisdiction also for the infringements with cross-border implications.

(33)

Paragraph 19 of the Commission Recommendation

(34)

See point 2.1.1 of this Report

(35)

Article 2(1)(a).

(36)

Paragraph 20 of the Commission Recommendation

(37)

Article 2(1)(c).

(38)

In addition in some Member States these sanctions are not determined in the injunction order and require additional legal action. Against that background the Fitness Check study recommends clear legal rules at EU level on sanctions for non-compliance with the injunctions order

(39)

Except for one respondent from RO who emphasised that the fine imposed by the National Consumer Authority for non-compliance with a judgment is extremely low and has no deterring effect, no special issues with this principle were reported in the call for evidence.

(40)

Paragraphs 21 to 24 of the Commission Recommendation

(41)

Three replies to the call for evidence expressed support for an "opt-out" system, for instance in specific situations where it is difficult to identify the persons affected such as where alleged human rights violations are committed in third countries, in particular related to working conditions, and action can be taken against defendants with a seat in a Member State. However, one respondent from the UK had doubts about the effectiveness of the "opt-out" system, as experience shows that it involves high costs and administrative burden in order to identify the individuals that fall within a certain class. Finally, a respondent from NL expressed support for a system that would differentiate between an "opt-in" for collective court action and "opt-out" for collective settlement, while a respondent from BE specifically favoured the "opt-in" system.


(42)

Paragraphs 25 to 28 of the Commission Recommendation

(43)

OJ L 136, 24.5.2008, p. 3

(44)

Recital 27 of Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC clarifies that that Directive does not regulate collective ADR in the consumer area but is without prejudice to Member States maintaining or introducing such ADR procedures.

(45)

Point 26 of the Recommendation in comparison with Article 1 of Directive 2013/11/EU which stipulates that that Directive is without prejudice to national legislation making participation in ADR procedures mandatory, provided that such legislation does not prevent parties from exercising their right of access to the judicial system.

(46)

For instance several replies mention the NL experience with legislation on collective settlements reviewed by courts (WCAM), where direct settlement negotiations and court proceedings are pending in parallel. One reply mentions that out of the ten consumer collective redress cases lodged in FR since the introduction of legislation in October 2014, two were settled (with the subsequent validation by a court). A similar experience was mentioned in SE, FI and BE, where a court validated recently an agreement reached in a consumer case related to passenger rights.

(47)

Paragraphs 29 and 30 of the Commission Recommendation

(48)

Paragraph 31 of the Commission Recommendation

(49)

Due to the absence of a compensatory collective redress system punitive damages have not been of relevance in this area.

(50)

Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, OJ L 349, 5.12.2014, p. 1

(51)

Paragraphs 33 and 34 of the Commission Recommendation

(52)

Outside the scope of Directive 2014/104/EU inasmuch as Member States allow collective follow-on in the area of competition law.

(53)

Paragraphs 35 to 37 of the Commission Recommendation

(54)

COM(2017)650 final